Student Loan Eligibility: Private and Federal Loans

There are two types of student loans: private and federal. While private student loans are provided by private entities such as banks and financial institutions, federal student loans are provided by the federal government. If you think you may need a student loan to pay for college, check your student loan eligibility ASAP.

How to Check Your Eligibility

Private Student Loans: Each private student lender has its own unique eligibility requirements. Therefore, the easiest way to check your eligibility for multiple private student loans at once is to use the Sparrow application. Sparrow will show you the lenders you’re eligible to borrow from and the exact interest rate you’d qualify for with each one.
Federal Student Loans: To check your eligibility for federal student loans, you must complete the FAFSA.

Who is Eligible for a Student Loan?

Private Student Loans

Private student loans are provided by a lender such as a bank, credit union, state agency, or a school. Each lender has different rates and eligibility requirements. However, in just two minutes, you can check your student loan rate and eligibility with 17+ lenders by using the Sparrow application.

While each private student lender will have its own unique eligibility, there are a few that tend to be the same across the board:

Enroll in an eligible program: Private student loans can only be used for education costs. Therefore, you’ll need to enroll in an eligible academic program to be considered for private student loans.
Be a U.S. citizen, permanent resident or eligible international student. Most private student lenders will require you to be a U.S. citizen or permanent resident with a Social Security number.

If you are an international student, you’ll be eligible with many lenders if you have a cosigner who is a U.S. citizen or permanent resident. If not, MPOWER and Prodigy also provide student loans to international students without an SSN or credit history.

Federal Student Loans

To qualify for federal student loans, you must:

*Demonstrate financial need (for most programs). Whether or not you must prove financial need depends on the type of student loan. Specifically, to qualify for Federal Direct Subsidized Loans, you’ll need to show financial need. To receive Direct Unsubsidized or PLUS Loans, you do not need to demonstrate financial need.

*Your financial need is calculated based on the information you provide on the FAFSA.
Be a U.S. citizen or *eligible noncitizen. In general, you must be a U.S. citizen or eligible noncitizen to qualify for federal student loans. However, in some cases, legal U.S. residents without citizenship may qualify.

* An eligible noncitizen is a U.S. national, U.S. permanent resident, or an individual holding an Arrival-Departure Record from U.S. Citizenship and Immigration Services under one of the following titles:
Refugee
Asylum Granted
Cuban-Haitian Entrant
Conditional Entrant (valid if issued before April 1, 1980)
Victims of Human Trafficking (T-Visa -2, -3, or -4 holders)
Parolee (with certain conditions)
Have a Social Security number. In most cases, you need a social security number to be eligible. However, there are a few U.S. territories in which you would not need a Social Security number.
Enroll in an eligible academic program. Federal student loans can only be used for accredited or recognized, degree-granting programs. Therefore, if you aren’t attending one of these schools, you won’t be able to receive federal student loans.
Have satisfactory academic progress. Each individual school will have its own academic requirements. Accordingly, if you do not meet those, you can be denied federal financial aid including federal student loans.
Enroll at least half-time (for Federal Direct Loans only). For Federal Direct Loans, you must be enrolled at least half-time.
Complete the FAFSA. The FAFSA collects and processes your financial information to determine your eligibility for need-based aid. In order to qualify for any federal student loans, you must complete the FAFSA.
Meet all qualifications for your specific program. To be considered a student at your respective school, you must meet their enrollment requirements. Generally, this may mean having a high school diploma or GED. You must meet all of your school’s requirements in order to be eligible for federal student aid.

Note: Selective Service registration is no longer required to qualify for federal student loans.

How is Student Loan Eligibility Determined?

Eligibility for private student loans depends on the lender. Each lender looks at your application against a different set of criteria. Check your student loan eligibility across multiple lenders at once. In general, here are the main factors that determine your eligibility:

Credit score and credit history
Income and debt
Enrollment in qualified academic programs

Eligibility for federal student loans will depend on whether you meet the FAFSA criteria. After filling out the FAFSA, your information will be used to determine if you qualify for federal student loans. Then, it will determine what type of loans you are eligible for and how much aid you are eligible for overall.

What Disqualifies You From Getting a Student Loan?

Student loan applications can be denied for a variety of reasons. The most common reasons are not meeting the basic eligibility criteria for the respective loan. However, there are other ways you can be disqualified from obtaining a student loan.

Private Student Loans

Each private lender has their own unique requirements to qualify for a student loan. Lenders will look at a variety of factors to determine whether you are eligible to borrow from them. This includes, but is not limited to:

Your employment history
Your credit score
Your debt-to-income ratio
Your enrollment status at a qualifying school

If you do not meet the basic eligibility criteria within these categories, you may not qualify for a private student loan with that specific lender.

Federal Student Loans

If you do not complete the FAFSA, you will not be able to receive federal student loans.

Additionally, being convicted of certain crimes can also be cause for disqualification. Drug-related crimes, such as sale of illegal drugs or drug possession, can disqualify you from receiving federal aid in the future.

Is There an Age Limit for a Student Loan?

For many private student loans, you must be at least 18 years old to take out a loan. This number can vary from state to state.

For federal student loans, you must submit the FAFSA. In order to submit the FAFSA, you need an FSA ID. Applicants must be at least 13 years old to obtain an FSA ID. However, there is no upper age limit for federal student loans.

Final Thoughts from the Nest

Federal and private student loans each have their own eligibility requirements. Before submitting the FAFSA or applying for a private student loan, make sure you meet the basic eligibility requirements.

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